Exhibit 10.39
AMENDED AND RESTATED
EXCLUSIVE LICENSE AGREEMENT
for
ADIPOSE-DERIVED STEM CELLS
This
amended and restated exclusive license agreement ("Agreement")
is made effective this 6
th day
of September, 2006 ("Effective Date"), between The Regents of the
University of California, a California corporation, having its
statewide administrative offices at 1111 Franklin Street, 12th
Floor, Oakland, California 94607-5200 ("The Regents"), and Cytori
Therapeutics, Inc., a Delaware corporation, having a principal
place of business at 3020 Callan Road, San Diego, CA 92121
("Licensee").
BACKGROUND IN CONNECTION WITH THE AMENDMENT AND
RESTATEMENT
A.
The Regents and StemSource, Inc. entered into that certain
Exclusive License Agreement for Adipose-Derived Stem Cells
(U.C. Agreement Control Number 2002-03-0194) effective October
16, 2001 (the “License Agreement”), as amended by
the Amendment to Exclusive License Agreement between The
Regents and StemSource, Inc. dated January 23, 2002, and by
the Consent Of Substitution Of Party dated November 8, 2002
pursuant to which Cytori Therapeutics, Inc (formerly MacroPore
Biosurgery, Inc.) was substituted in as the exclusive licensee
to The Regents interest in certain Inventions (as described
below), under terms and conditions set forth in the License
Agreement.
B.
The Regents and Licensee have recently reached a mutual
understanding that the License Agreement drafted in 2001 no
longer accurately reflected the business model of the
Licensee, and that it contained certain restrictions and
milestones that were not optimal for the commercialization of
the Invention portfolio.
C.
In light of these issues, the parties have agreed to amend and
restate the License Agreement to maximize the commercial
potential for the Inventions, the interests of the parties and
the public good.
BACKGROUND
OF THE INVENTIONS
A.
Certain inventions, generally characterized as
"Adipose-Derived Stem Cells and Lattices" ("Inventions"), were
made in the course of research at the University of
California, Los Angeles by Drs. Marc H. Hedrick, H. Peter
Lorenz, Prosper Benhaim and Min Zhu ("Regents' Inventors") and
as of the Effective Date named inventors at the University of
Pittsburgh ("Pittsburgh") include Drs. Adam J. Katz, J.
Ramón Llull and J. William Futrell ("Pittsburgh's
Inventors") (collectively, the "Inventors"). The Inventions
are disclosed in UC Case No. 2000-310 and are covered by
Patent Rights as defined below.
B.
Licensee acknowledges that The Regents and Pittsburgh have not
entered into any agreement that sets out the rights of each in
regards to patent prosecution matters, inventorship, or
licensing of the Inventions.
C.
Licensee acknowledges that Pittsburgh has filed and taken the
lead in prosecuting PCT/US00/06232 (filed 03/10/2000 and
designating the US) and The Regents has filed and taken the
lead in prosecuting a Continuation-in-Part application (filed
09/10/2001). No decisions have been made by the parties
concerning Patent Rights.
D.
Licensee acknowledges that certain of the Inventions may be
jointly owned by The Regents and Pittsburgh and that each
party is licensing its interest in Patent Rights independently
of the other.
E.
Licensee acknowledges and agrees that the rights granted under
this Agreement may be limited by Pittsburgh's joint ownership
or sole ownership in certain claims under Patent Rights, and
the licenses granted under this Agreement are granted solely
under The Regents undivided interest in Patent Rights,
whatever those rights might be.
F.
Licensee wishes to obtain rights from The Regents for the
exclusive commercial development, use and sale of products
from The Regents' interest in the Inventions, and The Regents
is willing to grant those rights so that the Inventions may be
developed to their fullest and the benefits enjoyed by the
general public.
G.
Licensee is "a small business firm" as defined in 15 U.S.C.
§ 632.
H.
Licensee and The Regents recognize and agree that (subject to
Sections 2.2 and 2.3 below) royalties due under this Agreement
on products and methods will be paid by Licensee on both
pending patent applications and issued patents.
In
view of the foregoing, the parties agree:
"Affiliate"
means any corporation or other business entity: (i) in which
Licensee owns or controls, directly or indirectly, at least fifty
percent (50%) of the outstanding stock or other voting rights
entitled to elect directors; or (ii) which owns, directly or
indirectly, at least fifty percent (50%) of the outstanding stock
or other voting rights entitled to elect directors of the Licensee;
or (iii) which is under common ownership or control with Licensee
to the extent of at least fifty percent (50%) of the outstanding
stock or other voting rights entitled to elect directors.
Notwithstanding the foregoing, in any country where the local law
does not permit foreign equity participation of at least fifty
percent (50%), then an "Affiliate" includes any company in which
Licensee owns or controls, or is owned or controlled by, or is
under common ownership or control with, directly or indirectly, the
maximum percentage of outstanding stock or voting rights permitted
by local law.
"Licensed Method"
means any method that is covered by or claimed in Patent Rights, or
the use of which would constitute, but for the license granted to
Licensee under this Agreement, an infringement of any unexpired
claim of a patent or pending claim of a patent application included
in Patent Rights.
"Licensed Product"
means any product that is covered by or claimed in Patent Rights;
that is used in a manner requiring the performance of the Licensed
Method; that is produced by the Licensed Method or that the
manufacture, use or sale of which would be an infringement, but for
the license granted to Licensee pursuant to this Agreement, of an
unexpired claim of a patent or pending claim of a patent
application included in Patent Rights. This definition of Licensed
Product also includes a service either used by Licensee or an
Affiliate or sublicensee or provided by Licensee an Affiliate or
sublicensee to its customers when such service requires the use of
Licensed Product or performance of Licensed
Method.
“Research Product”
means a Licensed Product that is not a Clinical Product and is sold
for research purposes or drug discovery purposes, i.e. an assay for
identifying or validating human therapeutic
drugs.
“Clinical Product”
means a Licensed Product which, were it sold in the United States,
would require regulatory approval from the United States Food and
Drug Administration.
“Product”
means Research Product and Clinical Product.
1.7
“Field” means
any and all products and/or services for the research, diagnosis,
and/or therapy of disease and/or dissorders in humans and for
cosmetic applications in humans.
1.8
"Net Sales" means
the total of the gross invoice prices from the Final Sale of
Product, or Licensed Method performed by Licensee or an Affiliate,
less the sum of the following actual and customary deductions where
applicable: cash, trade or quantity discounts; sales, use, tariff,
import/export duties or other excise taxes imposed on particular
sales (excepting value added taxes or income taxes); transportation
charges, including insurance; and allowances or credits to
customers because of rejections or returns. Final Sale means the
last sale within the control of Licensee or an Affiliate to an
independent third party (including without limitation to
distributors and agents). If the Licensee or an Affiliate sells
Licensed Products to a sublicense, an Affiliate or the Licensee for
the recipient’s end use (and not for resale, clinical
studies, clinical trials, or other research to promote
commercialization), then such sales will be considered a Final sale
at the price normally charged to independent, unaffiliated third
parties at the time of such end use sale or, if there is no such
price, at the fair market value thereof at the time of such end use
sale. Any sale of a Product by Licensee or an Affiliate to an
Affiliate, the Licensee, or a sublicensee will not be considered a
Final Sale where such sale is not for end use by Licensee, an
Affiliate or a sublicensee. If Licensee
or
an Affiliate sells
at a single price or rate a packaged combination of products (or
“Kit”), not all of which if sold individually would be
Licensed Products, then “Net Sales” with respect to
such sales of such Kit or packaged products shall equal the number
of units of Licensed Products sold as part of such Kit (less
rejections, defects and returns) multiplied by either (i) the
respective average net selling price during such period of the same
type of Licensed Product sold individually, or (ii) the average net
selling price during such period for a comparable product (if the
same type of Product is not sold individually), in either case
excluding sales, use or excise tax, freight, duty or insurance
included therein. ***.
Additionally, for the avoidance of doubt, if such product is an
indivisible component of a larger product, composition of matter or
combination product (the components of which cannot be sold
separately), then such composition of matter or combination product
is deemed in its entirety to be a Licensed Product for purposes of
this definition.
1.9 "Patent
Rights
" means The Regents' undivided interest in the following United
States patents and patent applications, corresponding foreign
patents and patent applications, and any reissues, extensions,
substitutions, continuations, divisions, and continuation-in-part
applications but excluding continuation-in-part applications (to
the extent that claims are not supported in the
parent);
1.9.1
United States Patent Application No. 60/123,711 entitled
“Isolation of Stromal Cells from Adipose Tissue,” filed
March 10, 1999, by Dr. Marc Hedrick et al (UC Case 2000-310-1) -
inactive;
1.9.2.
United States Patent Application No. 60,162,462 entitled
“Isolation of Mesenchymal Stem Cells from Adipose
Tissue,” filed October 29, 1999, by Dr. Marc Hedrick et al.
(UC Case No. 2000-301-2) - converted;
1.9.3
United States Patent Application No. 09/947,985 entitled
“Adipose-Derived Stem Cells and Lattices,” filed Sept.
6, 2001, by Adam Katz et al (UC Case No. 2000-310-3),
abandoned;
1.9.4
United States Patent Serial No. 6,777,231 entitled
“Adipose-Derived Stem Cells and Lattices,” issued
August 17, 2004 by Dr. Marc Hedrick et al (UC Case
2000-310-4).;
1.9.5
United States Patent Application No. 09/952,522 entitled
“Adipose-Derived Stem Cells and Lattices,” filed
September 10, 2001, by Dr. Marc Hedrick et al.; (UC Case No.
2000-310-5) now abandoned;
1.9.6
United States Patent Application No.10/651,564 entitled
‘Adipose-Derived Stem Cells and Lattices,” filed August
29, 2003, by Dr. Adam J. Katz et al.; (UC Case No.
2000-310-6);
1.9.7
United States Patent Application No. 10/740,315 entitled
“Adipose-Derived Stem Cells and Lattices,” filed
December 17, 2003, by Dr. Dr. Marc Hedrick et al.; (UC Case No.
2000-310-7);
1.9.8
United States Patent Application No. 10/797,371 entitled
“Adipose-Derived Stem Cells and Lattices,” filed March
9, 2004, by Dr. Adam Katz et al.; (UC Case No.
2000-310-8);
1.9.9
United States Patent Application No. 10/845,315 entitled
“Adipose-Derived Stem Cells and Lattices,” filed May
12, 2004, by Dr. Adam Katz et al.; (UC Case No.
2000-310-9);
1.9.10
United States Patent Application No. 11/211,114 entitled
“Adipose-Derived Stem Cells and Lattices,” filed August
24, 2005, by Dr. Marc Hedrick et al.; (UC Case No.
2000-310-A).
__________
***Material
has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange
Commission.
2.
LIFE OF PATENT EXCLUSIVE GRANT
2.1
Subject to the limitations set forth in this Agreement, The
Regents grants to Licensee a world-wide license under The Regents'
undivided interest in Patent Rights to make, have made, use, sell,
offer to sell and import Product and to practice Licensed Method in
the Field to the extent permitted by
law.
2.2
The
Regents acknowledge Licensee is currently commercializing an
automated device called “Celution”, which when
operated in conjunction with various disposable component
parts is capable of producing a heterogeneous isolate of the
material naturally occurring in adipose tissue including
unmodified amounts of stem cells and other regenerative cells
( hereafter “PLA”), intended for human
therapeutic, diagnostic, cosmetic and other uses;
2.3
Licensee
and the Regents acknowledge and agree that (except as provided
below in this Paragraph 2.3) Licensee’s Celution device
and PLA shall be deemed not to be included in or covered by
the Patent Rights for purposes of this License, and that such
exclusion shall not constitute an admission by The Regents
that the Celution device or the PLA are not encompassed,
either in whole or in part, within the Regents Patent Rights.
Nor shall the Regents be barred from later requiring that the
Celution device and PLA be governed by the terms of this
Agreement in the event (and to the extent) of any subsequent
issuance of claims under prosecution in the Patent Rights that
would cause either Licensees Celution device or PLA to fall
within the category of “Licensed Products” or
“Licensed Methods”. In no event shall any
subsequent royalty associated with Licensees Celution device
or the PLA exceed ***.
2.4
Licensee acknowledges that Pittsburgh has the right to grant
licenses to its undivided interest in Patent
Rights.
2.5
Except as otherwise provided in this Agreement, the license
granted in Paragraph
2.1
is exclusive for the life of the Agreement.
2.6
The Regents reserves the right to practice, and for other
educational and non-profit institutions to practice, the Inventions
and associated technology for educational and research purposes,
including publication and other communication of research
results.
3.
SUBLICENSES
3.1
The Regents also grants to Licensee the right to issue
sublicenses to third parties to make, have made, use, sell, and
offer to sell and import Products and to practice Licensed Method,
as long as Licensee has current exclusive rights thereto under this
Agreement, except that the sublicensee may not be granted the right
to further sublicense the technology without the prior approval by
The Regents, which approval shall be granted only upon Licensees
provision of substantial assurances that the Regents interests in
the technology will at all times be maintained. To the extent
applicable, sublicenses must include all of the rights of and
obligations due to The Regents contained in this Agreement. The
Licensee will not issue additional paid-up sublicenses without
prior written approval of The Regents. For the avoidance of doubt,
Licensee’s Affiliates are not licensed under this Agreement,
except by a written sublicense agreement under this Article 3. And
furthermore, The Regents hereby acknowledges and approves the
sublicense issued by Licensee to Olympus-Cytori, Inc, entitled
License/Commercial Agreement dated November 4, 2005, and
acknowledges additionally that such sublicense is fully paid-up
with respect to the Regents for the life
thereof.
3.2
The Licensee will pay to The Regents *** under each sublicense
agreement issued for the purpose of development or
commercialization of Products (the “Purpose”) after the
Effective Date (“Sublicensing Revenue”). Sublicensing
Revenue will be the sole form of compensation payable to the
Regents by Licensee with respect to any and all sublicenses granted
hereunder. Sublicensing Revenue will not include the following:
***
The operations of all sublicensees will be deemed to be the
operations of the Licensee, for which the Licensee will be
responsible. The Licensee will notify The Regents of each
sublicense granted hereunder and provide The Regents with a
complete copy
__________
***Material
has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange
Commission.
of each sublicense within thirty (30) days of issuance of the
sublicense. The Licensee will pay to The Regents all Sublicensing
Revenue due in accordance with Article 4 (Sublicenses) below on or
before the due date of the royalty report applicable to the quarter
in which the Sublicensing Revenue is due to The Regents, in
accordance with Section 4.1. The Licensee will require the
sublicensees to provide it with Progress Reports and royalty
reports in accordance with the provisions herein, and the Licensee
will collect and deliver to The Regents all such reports due from
the sublicensees. For avoidance of doubt,
***.
3.3
In
the event that The Regents rights to United States Patent
Serial No. 6,777,231 are finally determined not to be solely
owned and assigned to The Regents in connection with the
pending Complaint for Correction of Inventorship by the
University of Pittsburgh vs. Hedrick et al. (U.S. Disc. Ct.,
C.D. Cal, Case No. CV 04-9014 CBM (AJWX)) (the
“Complaint”), or ***
.
3.4
Upon termination of this Agreement for any reason, The Regents,
will enter into written agreements with all sublicensees then in
compliance with their obligations under this Agreement and who are
willing to enter into direct agreements with The Regents on terms
no less favorable to such sublicensees than set forth in their
respective sublicense agreements. In no case, however, will The
Regents be bound by duties and obligations contained in any
sublicense that extend beyond the duties and obligations of The
Regents set forth in this Agreement.
4.1
Paragraphs 1.9, 1.2 and 1.3 define Patent Rights, Licensed
Method, and Licensed Product so that royalties are payable on
products and methods covered by both pending patent applications
and issued patents (subject to Paragraphs 2.1 and 2.3). Royalties
will accrue in each country for the duration of Patent Rights in
that country and are payable to The Regents thirty (30) days after
the Product is invoiced or if not invoiced, when delivered to a
third party. Sublicensing Revenue will accrue in each country for
the duration of Patent Rights in that country and are payable to
The Regents thirty (30) days after payment is due to the Licensee
under the sublicense agreement.
4.2
Licensee will pay to The Regents earned royalties and
Sublicensing Revenue quarterly on or before February 28, May 31,
August 31 and November 30 of each calendar year. Each payment will
be for earned royalties and Sublicensing Revenue accrued within
Licensee's most recently completed calendar
quarter.
4.3
All monies due The Regents are payable in U.S. dollars.
Licensee is responsible for all bank transfer charges. When Product
is sold for monies other than U.S. dollars, Licensee will first
determine the earned royalty in the currency of the country in
which Product was sold and then convert the amount into equivalent
U.S. funds, using the exchange rate quoted in The Wall Street
Journal on the last business day of the reporting
period.
4.4
Sublicensing Revenue and royalties earned on sales
occurring in any country outside the U.S. may not be reduced by any
taxes, fees or other charges imposed by the government of such
country on the payment of royalty income. Notwithstanding the
foregoing, all payments made by Licensee in fulfillment of The
Regents' tax liability in any particular country will be credited
against earned royalties or fees due The Regents for that
country.
4.5
If at any time legal restrictions prevent the prompt
remittance of royalties by Licensee from any country where a
Product is sold or Sublicensing Revenue accrued, then Licensee will
deposit the amount owed to The Regents into an interest bearing
account and will pay The Regents directly from this account or from
its U.S. source of funds within a year of the due
date.
4.6
If any patent or patent claim within Patent Rights is
abandoned or held invalid in a final decision by a court of
competent jurisdiction and last resort and from which no appeal has
or can be taken, then all obligation to pay royalties or
Sublicensing Revenue based on that patent or claim or any claim
patentably indistinct there from will cease as of the date of final
decision. Licensee will not, however, be relieved from paying any
royalties that accrued before the final decision or that are based
on another patent or claim not involved in the final decision or
that are based on The Regents' property
rights.
__________
***Material
has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange
Commission.
4.7
In the event payments, rebillings or fees are not
received by The Regents when due, Licensee will pay to The Regents
interest charges at a rate of ten percent (10%) per annum. Interest
is calculated from the date payment was due until actually received
by The Regents.
5.
LICENSE AMENDMENT CONSIDERATION
5.1
As consideration for this amendment and restating of the
Agreement, the Licensee will issue to The Regents one hundred
thousand (100,000) shares of common stock (“the Stock”)
of Cytori Therapeutics, Inc, within seven (7) days of the Effective
Date of this Agreement or of the date Licensee receives notice from
The Regents that The Regents’ Office of the President has
approved acceptance of Stock, whichever is later. Licensee will use
reasonable efforts to, within sixty (60) business days after such
issuance, prepare and file with the US Securities and Exchange
Commission (the "Commission") a Registration Statement covering the
resale of the Shares for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement will be on
Form S-3 (except if Licensee is not then eligible to register for
resale the Shares on Form S-3, in which case such registration will
be on another appropriate form in accordance with the US Securities
Act and the rules promulgated there under). Licensee will use its
reasonable efforts to cause the Registration Statement to be
declared effective under the US Securities Act within ninety (90)
business days after such filing. Licensee will keep such
Registration Statement continuously effective under the Securities
Act for a period of two (2) years (the “Effectiveness
Period”). The Regents represents that they would acquire the
Shares for their own account for investment, and not with a view to
any distribution, which would violate any applicable securities
laws. The Regents acknowledges that they have not received and are
not relying upon any advice, representations or assurances made by
or on behalf of the Licensee or any Licensee affiliate or any
employee of or counsel to Licensee regarding the Shares. The
Regents may transfer, or direct Licensee to transfer, to
Regents’ Inventors an inventor share portion of the Stock
under Regent’s Patent Policy.
6.
LICENSE MAINTENANCE FEE AND MILESTONE
PAYMENTS
6.1
Licensee will also pay to The Regents a royalty in the form of
a license maintenance fee as follows:
6.1.1
Fifty Thousand Dollars ($50,000) on or before June 30,
2008;
6.1.2
Fifty Thousand Dollars ($50,000), on or before June 30,
2009;
6.1.3
Seventy-Five Thousand Dollars ($75,000) on or before June 30,
2010;
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6.1.4 |
One Hundred Thousand Dollars ($100,000) on or before June 30,
2011;
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6.1.5 |
One Hundred Thousand Dollars ($100,000) on or before June 30, 2012;
and,
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6.1.6 |
One Hundred Thousand Dollars ($100,000) on or before June 30,
2013.
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6.2 |
The license maintenance fee is not due on any anniversary of
the Effective Date if Licenseeis commercially selling Product on
that date and paying an earned royalty to The Regents on the sales
of that Licensed Product. License maintenance fees are
non-refundable and not an advance against earned
royalties.
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7.
EARNED ROYALTIES AND MINIMUM ANNUAL
ROYALTIES
7.1
Licensee will also pay to The Regents an earned royalty of ***
based on the Net Sales of Product sold by the
Licensee.
__________
***Material
has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange
Commission.
7.2
In the event that it becomes necessary for Licensee to license
patent rights owned by third parties to make, have made, use or
sell Clinical Product, then the Licensee will have the right to
obtain the patent rights from such
